Despite vaccine optimism being counteracted by concerns over the economic impact of Covid-19 lockdowns, the FTSE 100 gained ground on Friday as UK retail sales beat expectations for October and briefings suggested a Brexit deal is gradually moving closer.

By midday, the blue chip benchmark was up 0.5% to 6,366.15, with US futures markets suggesting a mixed open on Wall Street later as concerns about the fate of desperately-needed financial stimulus continue to linger.

SAGE SLUMPS

In company news, the big faller was software group Sage (SGE), which tumbled 13.2% to 590p after its organic operating profit fell 3.7% to £391 million and its operating profit margin dipped 1.7% to 22.1% in the year to 30 September 2020.

Investors were put off the stock after it added that its organic operating margin is expected to be up to 3% below this year’s figure, depending on the level of additional investment it makes during the year.

But there were some plus points for the firm as it reported an 8.5% increase in organic recurring revenue, a 15% increase in earnings per share and a 2% rise in its dividend to 17.25p.

Packaging company Smurfit Kappa (SKG) fell 2.7% to £31.36 after it raised €660 million through a share issue. The company listed 19.4 million new shares, selling them at €34.00 each or £30.46 for investors who elected to settle in sterling.

The new shares represent approximately 8.1% of the company’s issued share capital immediately prior to the placing.

CEO Tony Smurfit said yesterday that the proceeds would be used to enable the company to accelerate investment over the next three years and improve financial flexibility.

Gold and silver miner Hochschild Mining (HOC) nudged up 0.2p to 221.2p as it resumed its dividend and said it was on track to meet its revised production guidance, while it lowered its outlook on annual cost.

With regards to the current financial year, Hochschild said it remained on track to meet revised production guidance of 280,000-290,000 ounces of gold and 24-25 million ounces of silver.

Meanwhile, two major investment trusts issued first half reports. The Edinburgh Investment Trust (EDIN) rose 1% to 523p as it reported net asset value (NAV) total return growth of 7.8%, above the 7% return generated by the FTSE All-Share index in the six months to the end of September.

And Personal Assets Trust (PNL) recorded a NAV gain of 2.9% over the six months to 31 October, while the FTSE All-Share fell by 3.4%. The trust’s shares were up 0.3% to £455.50 each.

OTHER COMPANY NEWS

Elsewhere, technology company Telit Communications (TCM:AIM) saw its share price jump 18% to 198.6p after it received a merger offer from Swiss firm u-blox.

The proposed deal valued the firm at £2.50 a share, or approximately £332.6 million, and would result in Telit shareholders owning 53% of the combined company.

Cruise operator Carnival (CCL) gained 2.4% to £12 after it raised $888 million through a share issue to finance the repurchasing of convertible bonds.

Real estate investment trust Segro (SGRO) dipped 0.2% to 907p after it received approval to list shares on the Euronext Paris stock market. It will remain listed in the UK.

Pest control giant Rentokil Initial (RTO) gained 1.7% to 524.2p as it purchased €174.3 million of its bonds from holders.

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account.

Issue Date: 20 Nov 2020